Consultants exempt from pay cut plan

Hospital consulants have been exempted from the Government's voluntary 15% pay cut, for now. Why so? And how much do they really earn? By Sara Burke.

It was reported in the Irish Times on Friday (24 June) that hospital consultants and/or their representative bodies had lobbied Minister for Health James Reilly so as not to be included in the 15% voluntary pay waiver announced by Minister for Public Expenditure and Reform on Wednesday last (22 June). This was refuted by both a spokesperson for the Minister of Health and the Department of Public Expenditure and Reform (known as PER). So why are consultants excluded? And who earns what in the public health system?

It is impossible to get a figure from the HSE as to how many people on its payroll of just under 106,000 staff earn over €200,000, an extraordinary fact in itself. It is somewhat explained by the fact that there are still 17 different payroll systems in the HSE; also, many of these 106,000 people are not direct staff of the HSE but people who work for voluntary hospitals or large voluntary agencies. How it is that seven years into its existence the HSE has not managed to merge the payroll systems remains an unanswered question.

However, it would appear that not very many of the workforce of 106,000 earn more than €200,000 from the public purse.

Let’s start outside of the HSE with the Minister - as a result of various different pay cuts, he now has a salary of €169,000. Michael Scanlon, the secretary general of the Department of Health, is now, as a result of the most recent voluntary cut (on top of the previous pay cuts), paid €200,000 exactly, although he will still get his pension at his previous rate. And according to the Department of Health no-one else in the department or in any of the agencies directly funded by them is paid over €200,000.

HSE chief executive Cathal McGee took up his post last year with a €322,000 basic salary, with no bonus, but a car allowance of €13,800. Yesterday, he confirmed he was happy to take the 15% voluntary reduction. This leaves him with a salary of €280,000 - significantly above that of the minister. According to the HSE none of its national directors earn over €200k (the highest band starts at €183k).

And again according the HSE, most consultants don’t earn over €200k from their public work – an important distinction as many earn significantly more than this when their public and private earnings are combined. Pay for consultants on type A contracts (who can only work in the public system) ranges between €176,000 and €196,000, while those on Type B (who are allowed to work privately) are paid between €146,000 and €158,000. However, they can earn multiples of that from their private work – see below.

Tracey Cooper, HIQA CEO, earns around  €170-180,000. The CEOs of the voluntary hospitals earn less than €200,000 from the public purse according to the pay scales, but some receive top up payments from the ‘research fund’ of their hospital.

Jimmy Tolan – the current VHI CEO, is the super high net earner in the health sector – his “total remuneration including pension paid to CEO to December 2010 amounted to a salary of €411,420 and performance related pay of €37,500”. That means he was paid the bones of €450,000 last year. He opted out of a bonus for 2011 (all semi-state CEOs were asked to do so by government). When asked if he taking the 15% waiver, I was told he already has taken a 40% pay cut from his original package - worth €665,320 including pension and bonuses. He resigned in May but is in post until November. Figures published by PER yesterday say the starting salary of the new CEO to be recruited to replace Tolan will be €191,000, a fraction of its predecessor’s.

So why is it so hard to know how much hospital consultants earn? 70% of those who work in the public system are allowed to work privately – with a cap of 20-30% on their workload. A minority far exceed that ratio. And while it is hard to get actual figures on their public salaries, it is impossible to get definitive figures on their private incomes.

HSE figures released for this article say that “27 non-academic hospital consultants earn more than €250,000”.

The HSE could not give a figure for the numbers of consultants paid more than €200,000. Many of the academic posts – for example a professor in a university also working as a consultant - could earn over €200,000, but this might comprise €180,000 from the HSE and however more from the university.

Incredibly, those consultants earning over €200,000 are not included in the 15% voluntary waiver introduced this week. James Reilly’s spokesperson said the matter was “still being brought to cabinet table” and “still in discussion as part of Croke Park”. The response from the Department of Public Expenditure and Reform was similar but different: “The same objectives are being pursued by Minister Reilly in relation to hospital consultants through a separate process which is ongoing.”

But there was general consternation that consultants were not included in the waiver as they are the highest earners in the health sector. And rumours abounded that the Minister had been lobbied by consultants to that effect. There was a rare and surprising silence from bodies representing the consultants on this issue.

So can we estimate consultants’ total income – their public and private earnings? No-one has those figures except Revenue, but in order to get a ballpark figure for consultants with Type B contracts - who are allowed to practice publicly and privately - one would need to add up their public salary, money paid to them by insurance companies, and money paid directly to consultants by people out of pocket for private care. And there is no way of collating that.

When asked how much they paid to consultants, the VHI said it was commercially sensitive information and released a statement saying: “We pay fees to over 2,300 consultants of which the average payout in 2010 was approximately €98,000 per consultant. 70% of consultants were paid less than €100,000 and 6% (138) paid more than  €300,000.” But these figures do not include their public income; nor what they get from other insurance incomes; money paid out of pocket, or other earnings – for example giving evidence in legal cases and so on.

Surely, given the introduction of the 15% voluntary pay waiver for all public servants earning over €200,000 we have the right to know how many consultants earn over €200,000 from public money and why they were excluded from this initiative.

Image top: a.drian.